US labor market shows mixed signs amid Fitch downgrade

US labor market shows mixed signs amid Fitch downgrade

KUWAIT: In the US, the latest ISM manufacturing index came in at 46.4, well below 50, indicating that the manufacturing sector is still in contraction. The figure displays the eighth month of the US manufacturing sector coming in at contraction territory, albeit at a slower pace. Meanwhile, PMI in the services sector declined to 52.7 from 53.9 previously. Although economic activity in the US services sector continues to expand, July’s reading shows a pullback in growth as the Fed look for signs of softening inflation in the services part of the economy.

Over in the US, the latest JOLTS job openings came in at 9.58 million, below the forecasted 9.61 million, dropping to its lowest level since April 2021. Nevertheless, the latest number comes to show that the labor market is still historically tight despite the aggressive interest rate hikes by the Fed. This decline is just what Fed doves needed to advocate for stopping interest rate hikes in the next meeting to not exert more pressure onto the economy. It seems that a “soft-landing” is very much achievable in the United States.

While the Fed started its vigorous rate hike increases, the fear of recession started to loom. However, the resilient